Dewey v. Stratton

PARDEE, Circuit Judge (after stating the facts). This case turns on the questions whether the interlocutory decree of March 19, 1896, was within the jurisdiction of the court, and, if so, whether it has been so far complied with as to justify and require the reopening and rehearing of matters adjudicated in 235. When this cause was formerly before this court we dismissed the appeal, because the decree appealed from was not a final decree, and to show its character we necessarily construed it, and determined its scope and effect, and we held; “The manner in which this cause was heard finds no warrant in the rules of correct chancery practice, and the order made upon the hearing of the demurrer is altogether irregular. This court, however, cannot enter upon a consideration of these questions, nor determine those raised by the assignment of errors, as we are satisfied the motion to dismiss the appeal must be sustained because the order made by the court is not a final decree. It is in the nature of a conditional order, its finality depending upon certain contingencies that might or might not occur. The decree passed in suit No. 235, November 18, 1893, was ordered to be vacated, and the cause reopened, and leave granted appellees to file an answer therein, if they should within 30 days deposit $4,000 in the registry of the court, and pay all the costs of this suit and in suit No. 235. But if the costs should not be paid, nor the deposit of $4,000 made, within the 30 days, or if the answer should not be filed within the time allowed, the decree in cause No. 235 was to remain in full force; and (using the concluding language of the decree) ‘complainants’ bill in this cause will thereupon stand dismissed as on final hearing, and all costs in this cause incurred in that event adjudged against them, for which execution may issue.’ Something more was required to make the decree final than was done in this case. If appellees failed to do what the order required to be done within the prescribed time, appellants should have applied to the court for a final decree dismissing the bill. If the order of court was fully [185] eomplied with by appellees, a final decree should have been passed, upon their application, reversing the decree in suit No. 235, and reopening that causo for further proceedings.” Stratton v. Dewey, 24 C. C. A. 435, 79 Fed. 32, 34. Ln so holding we neither decided, nor expressed an opinion to the effect, that the decree was justified by the bill and exhibits, nor even that the bill made a case under which the court could grant relief, and now these matters must be determined. The jurisdiction of courts of equity to reopen and set aside former decrees on the ground of accident, mistake, and surprise is well recognized and is frequently invoked, and herein we now find and hold that under the facts and circumstances shown in the bill (suit No. 294) it was within the discretion of the cii'cuit court to take jurisdiction and permit the same to be filed, and that, having permitted the bill to be filed and the defendants having appeared to answer and contest the same, the court had jurisdiction to render the interlocutory decree of March 19, 1896. That decree seems to have been granted before the bill was fully put at issue by an answer, and on a hearing on demurrer, and a rule to show cause why an injunction should not issue, and on affidavits, counter affidavits, and exhibits. That it was irregularly granted, and was probably erroneous, may be conceded; and if the appellees were now before this court, as heretofore, complaining of that action, instead of seeking to benefit by the final decree in the case awarding them the large sum paid in by the Deweys to secure a hearing in No. 235, we could see our way clear to reopen the whole litigation to that point, and correct the interlocutory decree. As the case stands, however, the appellees seem to have acquiesced in the interlocutory decree, and, instead of complaining thereof, now seek to avail themselves of all its provisions. Under this state of the case, we feel constrained to hold that the interlocutory decree is binding on the parties, and thus is presented the question whether the said decree was complied with so as to entitle the appellants to a hearing on the merits in suit No. 235. The final decree now under review adjudges “that said Charles P, Dewey and Albert B. Dewey did pay the costs in suits Nos. 294 and 235 wiihin the time required by said interlocutory decree entered in (his cause on the 19th day of March, 1896, and did deposit in this court the four thousand dollars and interest within the time provided in said interlocutory decree,” and to this extent it is sustained by the record. These conditions admitted to be performed were all and the only conditions precedent to the reopening of suit No. 235, and the setting aside of the decree pro confesso, and the final decree entered therein, and when wdthin the time specified the Dewey complainants paid all the costs, and deposited the sum of $4,000 and interest, they were entitled to file an answer in suit No. 235, and thereupon to have the real merits of that suit adjudged and decreed. The condition in the interlocutory decree that the Deweys were to file a full answer to the. allegations of the bill and interrogatories therein propounded was a condition subsequent, default in which could only be determined and decreed in suit No. 235, which suit it was declared should proceed after answer filed according to the rules of practice in equity. The Dewey complainants did file an apparently full answer to the allega [186] tions of the bill and answers to the interrogatories therein propounded, and the complainants so far followed the rules of practice in equity as to move to strike the answer out tor various reasons assigned, and in the same paper to except to the sufficiency of the answer. The record further shows- that on the exceptions so filed in No. 235 the court held the answer as filed not to be a sufficient answer to the bill, but thereupon on the same day granted leave to file an amended answer within 10 days. Within 10 days an amended answer was filed. To this amended answer the complainants in No. 235 filed a compound pleading made up of a motion to strike out, exceptions, and a demurrer. This pleading does not appear to have been passed upon by the court, and, so far as this record shows, said amended answer is now' on file, pending and undisposed of. In this state of the record it appears that the complainants in No. 294 have fully complied with the conditions precedent and subsequent contained in the decree of March 19, 1896; and as that decree has been acquiesced in by the parties, complainants and defendants, the scope and purpose of the bill in suit 294 has been accomplished, and the court erred in proceeding to dismiss said bill prior to the determination of the litigation in suit No. 235. It also appears that, so far as the decree appealed from reaffirms the former decrees in suit No. 235, w'hile an answer is therein pending and undisposed of, it is erroneous, and should be reversed. So far as we can ascertain the merits of the pending litigation from the record, we are of opinion that the decrees in suit- No. 235 were so far irregularly obtained through inadvertence, mistake, and surprise that equity requires that the defendants in that suit should have an opportunity to be heard on the merits, and to present their defenses, if any they have; and to that end the decree appealed from is reversed, and the cause is remanded to the circuit court, with instructions to stay -further proceedings in suit No. 294 until the issues in suit No. 235 are disposed of according to the rules of practice in equity, and otherwise to proceed in suit No. 235 in accordance with the views herein set forth, and as equity and good conscience may require. The costs of this appeal to be divided equally between the appellants and appellees.